Real Wealth Society

Tuesday, June 27, 2006

Are oligarchs less corrupt? By Joost van Steenis

Dear reader, this is the 74th letter of an Autonomous Thinker.

Three out of four Russians find corrupt civil servants a greater danger for the country than business people who enrich themselves.
President Putin, one of the oligarchs, said also that corrupt civil servants damage the country most. (Elitepeople seldom attack each other, they try to divide the masses).

But there are two questions.
1. Is the indirect damage by the corrupt elite not much more damaging than the relatively small direct corruption far down.
2. Why are lower civil servants corrupt?

1. Though the Gini coefficient, a measure of the income inequality in a country, does not include corruption and black money it gives some insight in the damage to the economy by the highest earners – damage in so far that the highest incomes have the power to reserve a substantial part of the total income of a country for the own group.


Wikipedia (
http://en.wikipedia.org/wiki/Gini_coefficient ) states that the inequality in Russia is less than in the USA - corruption in the USA is institutionalised. The USA has a Gini coefficient over 0.4 (and it is rising) about the same as China.

Attention, this concerns only registered incomes, in particular elitepeople can hide their wealth behind legal constructions.

Legalised corruption I have described in my third Letter about "Gatesian corruption " (
http://members.chello./nl/jsteenis/letter3.htm). Illegal corruption includes the so-called scandals of Enron or Ahold, but most of these cases are not prosecuted and the perpetrators remain free with their stolen money.
The corruption of well-placed masspeople is important but the corruption at the top reserves for the elite an important part of the national cake on which we are all feeding.


See also my 51st letter: Corruption is everywhere (
http://members.chello.nl/jsteenis/letter51.htm)

2. Though the salary of Russian civil servants was recently increased from 100 to 500 dollar it is clear that such incomes do not provide the prosperous lives that are propagated in TV-soaps as the utmost goal for all people. Lower civil servants can somewhat increase their income but higher civil servants want to live as oligarchs (I prefer to call them elitepeople) and they can increase their income immensely. In the West they use legal means by taking on different paid jobs, expensive emoluments and options on shares.


Voslensky described in his book "Nomenklatura" that the Russian top uses
about the same methods with their datscha's, own warehouses and entrance to the best universities. Since the Soviet Union disappeared the economic system continued to approach the American system. Both systems are corrupt because they allow the powerful to get more money for the group by using their undisputed power.

How do lower masspeople react on the greedy top that is bending the law to get as much money above the surplus they have already? Something has been changing in the last fifty years.


I come from a Middle Class family and fifty years ago there was a code in my class that state taxes should be paid. But then the media more and more reported details of the financial life of the elite and the Middle Class realised that the Upper Class was not so nice and that tax evasion was practised extensively. They changed their habits and also started to evade taxes – a clear example that the elite is the cause of a more corrupt attitude of masspeople. Nowadays everybody tries to evade taxes, triggered by the example of the highest class in the country. That mechanism occurs everywhere. When the top is corrupt, masspeople will also try to get more money by imitating the elite.

The relatively small corruption of Russian civil servants finds its origin in the big corruption of the elite. This can only change when the biggest corruption is attacked, when the corrupt (legal and illegal) way of life of the elite is stopped, including their idea that activities are only praiseworthy when they result in huge payments. From elitist leaders nothing can be expected. Only masspeople can change the world by invading the eliteworld so that elitepeople cannot anymore live the privileged and prosperous life they lived for ages.

Yours truly, Joost van Steenis
http://members.chello.nl/jsteenis
Ways to increase masspower

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